Penalties possible for GMO-labeling campaign donations

OLYMPIA – The campaign committee behind last fall’s food-labeling initiative could be fined this week for failing to report thousands of dollars of assistance from other groups until after the election.

The Yes on I-522 Committee is accused of not revealing the sources of nearly $118,000 of in-kind contributions, according to a probe by the Public Disclosure Commission, the state’s watchdog of campaign spending.

Most of those contributions came from ice cream maker Ben and Jerry’s in the form of free ice cream at an event, and roughly $95,000 in ads endorsing the measure which voters ultimately rejected.

Staffs of the commission and committee are negotiating a settlement that may include a penalty. Commissioners are scheduled to consider the deal at their meeting Thursday.

In the same meeting, commissioners will consider asking the attorney general to investigate an organization which gave nearly $300,000 to the Yes on I-522 committee in the course of the campaign.

PDC staff allege that Food Democracy Action! broke state election laws by neither registering as a political committee nor identifying its donors until after the Nov. 5 election. The group made $200,000 in cash donations and another $100,000 of in-kind contributions.

In a memo to commissioners, PDC staff members contend the maximum penalty the panel could levy is “inadequate” for the severity of the violation and want them to hand it off to the attorney general.

The allegations mirror those in a lawsuit that Attorney General Bob Ferguson filed against a leading opponent of the food labeling initiative in October.

Ferguson alleged the Grocery Manufacturers Association illegally collected and spent millions of dollars to defeat the ballot measure without registering as a committee or disclosing the identity of its donors. The association, which wound up raising $11 million, did register and release contributors’ names but still faces potential penalties.

“Truly fair elections demand all sides follow the rules by disclosing who their donors are and how much they are spending to advocate their views,” Ferguson said at the time.

Both PDC investigations stem from a complaint filed Oct. 25, 2013, by Rob Maguire, an attorney with Davis Wright Tremaine in Seattle. The firm represented the committee which ran the campaign against I-522.

The complaint, which ran 113 pages with all its enclosures, alleged supporters of I-522 “are routinely violating” state campaign disclosure laws and are “misleading the public.”

Initiative 522 would have required many foods and beverages to be labeled if they contained any genetically modified ingredients. Roughly $30 million was spent by the two sides in the campaign.

In its probe of the Yes on I-522 committee, the commission found it failed to report $117,708 of in-kind contributions until a few days after the election. These contributions are when someone pays for a campaign-related activity out of their own pocket. Whoever pays must inform the committee so it can be disclosed.

That amount was about one-fifth of all in-kind contributions received but only a smidgen of the $8 million raised and spent overall by the committee.

Three firms — Ben and Jerry’s, Dr. Bronner’s Magic Soaps and PCC Natural Markets — accounted for most of the unreported sum. All three had been publicly identified with the campaign and had made other contributions that were properly reported.

Philip Lloyd, treasurer for the Yes on I-522 committee, wrote in a Nov. 7 email to commission staff that in spite of extensive outreach to allies on reporting in-kind contributions, “some expenses were unintentionally overlooked.”

The commission meeting begins at 9:30 a.m. and can be viewed online at www.pdc.wa.gov.